Ganesh Chaturthi 2024: As we kick off the festive season of 2024 with Ganesh Chaturthi, reflecting on the Initial Public Offering (IPO) market reveals some astounding numbers. In essence, IPOs have become the talk of the town following the record highs of Nifty 50 and Sensex, capturing attention not only in the mainboard segment but also in the small and medium-sized enterprise (SME) space, despite SEBI’s cautionary note to investors regarding the SME IPO frenzy. In fact, The S&P BSE SME IPO has outperformed the Nifty 50 (26.73%) and BSE Sensex (23.23%) by rising 169.42% in a year.
Arun Kejriwal, the founder of Kejriwal Research and Investment Services highlighted that for more than 12 months, the markets have been experiencing an upward trend due to the stable political and economic environment. There is a demand for capital and expansion in the corporate sector in India, which has led to an increase in the utilisation of capital markets for raising funds through share listings instead of resorting to borrowing from banks and other financial institutions. This positive momentum is expected to persist as the demand for capital remains and the markets continue to advance.
August 2024 witnessed IPO fundraising reach a 27-month high, with ten businesses generating almost ₹17,047 crore, making it the busiest month for public offerings since May 2022, according to Pantomath Capital Advisors Private Ltd analysis.
Additionally, market experts think that positive regulatory changes, a strong domestic economy, heightened engagement from retail investors, and pent-up demand following the pandemic’s muted activity have all contributed to the IPO’s pace.
“Since the last festive period, it’s safe to say that the Indian markets have been performing strongly. The IPO momentum has been boosted by a robust domestic economy, increased retail investor participation, favourable regulatory reforms, and pent-up demand after subdued activity during the pandemic.
Regulatory changes, such as shortening IPO listing timelines and implementing an electronic IPO (e-IPO) system, have further fuelled IPO activity,” said Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund.
Over 80% of IPO trading above their issue prices
On the mainboard, from September 1, 2023 to September 6, 2024, there were 87 listings (translates to 81%), with 71 stocks gaining and 17 turning into multibaggers. TBO Tek Ltd, J G Chemicals Ltd, Ratnaveer Precision Engineering Ltd, Jupiter Life Line Hospitals Ltd, Unicommerce eSolutions Ltd, and Inox India Ltd were among the top gainers, experiencing substantial subscription numbers and gains ranging from 80% to 99%.
17 delivered Multibagger Returns
Out of the 17 stocks, the top six have yielded returns exceeding 200-600%. Indian Renewable Energy Development Agency Ltd has the highest returns at over 600%, followed by EMS Ltd at 285.1%, Signatureglobal (India) Ltd at 273.3%, Motisons Jewellers Ltd at 256.6%, Jyoti CNC Automation Ltd at 250.1%, and DOMS Industries Ltd at 232.9%.
| Company Name | Listing Date | Issue Size | Issue Price | Total Subscription | Listing Open Price (Rs.) | LTP (Rs.) | Current Gain (%) |
| Indian Renewable Energy Development Agency Ltd. | 29 Nov `23 | 2150.2 Cr | ₹ 324 | 38.8x | 50 | 227.4 | 610.6% |
| EMS Ltd. | 21 Sep `23 | 321.2 Cr | ₹ 211 | 75.3x | 282.1 | 812.6 | 285.1% |
| Signatureglobal (India) Ltd. | 27 Sep `23 | 730.0 Cr | ₹ 385 | 11.9x | 444 | 1437.1 | 273.3% |
| Motisons Jewellers Ltd. | 26 Dec `23 | 151.1 Cr | ₹ 55 | 159.6x | 109 | 196.1 | 256.6% |
| Jyoti CNC Automation Ltd. | 16 Jan `24 | 1000 Cr | ₹ 331 | 38.5x | 370 | 1158.8 | 250.1% |
| DOMS Industries Ltd. | 20 Dec `23 | 1200 Cr | ₹ 790 | 93.5x | 1400 | 2629.9 | 232.9% |
| Azad Engineering Ltd. | 28 Dec `23 | 740.0 Cr | ₹ 524 | 80.7x | 720 | 1556.8 | 197.1% |
| JSW Infrastructure Ltd. | 03 Oct `23 | 2800 Cr | ₹ 119 | 37.4x | 143 | 307 | 158% |
| Protean eGov Technologies Ltd. | 13 Nov `23 | 490.3 Cr | ₹ 792 | 23.9x | 792 | 2027.4 | 156% |
| Exicom Tele-Systems Ltd. | 05 Mar `24 | 424.1 Cr | ₹ 142 | 129.5x | 265 | 348.6 | 145.5% |
| Platinum Industries Ltd. | 05 Mar `24 | 235.3 Cr | ₹ 171 | 99.0x | 225 | 414.9 | 142.6% |
| Vishnu Prakash R Punglia Ltd. | 05 Sep `23 | 308.9 Cr | ₹ 99 | 87.8x | 165 | 237.9 | 140.3% |
| Tata Technologies Ltd. | 30 Nov `23 | 3042.5 Cr | ₹ 500 | 69.4x | 1200 | 1112.7 | 122.5% |
| Zaggle Prepaid Ocean Services Ltd. | 22 Sep `23 | 563.4 Cr | ₹ 164 | 12.6x | 164 | 355.6 | 116.8% |
| Suraj Estate Developers Ltd. | 26 Dec `23 | 400.0 Cr | ₹ 360 | 15.7x | 340 | 772.5 | 114.6% |
| Bharti Hexacom Ltd. | 12 Apr `24 | 4275 Cr | ₹ 570 | 29.9x | 755 | 1199.2 | 110.4% |
| Awfis Space Solutions Ltd. | 30 May `24 | 598.9 Cr | ₹ 383 | 108.6x | 435 | 771.5 | 101.5% |
| Source: trendlyne |
On the other side, Rishabh Instruments Ltd, Sai Silks (Kalamandir) Ltd, Valiant Laboratories Ltd, IRM Energy Ltd, ESAF Small Finance Bank Ltd, Fedbank Financial Services Ltd, Flair Writing Industries Ltd, Credo Brands Marketing Ltd, Capital Small Finance Bank Ltd, GPT Healthcare Ltd, R K Swamy Ltd, Gopal Snacks Ltd, Popular Vehicles and Services Ltd, Akme Fintrade (India) Ltd, Ceigall India Ltd, and Saraswati Saree Depot Ltd have all experienced declines ranging from 1% to 37% in the same period.
IPO frenzy drove demat account in India
Several reports claimed that the huge rise in IPOs has resulted in a spike of demat accounts. Data from the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) show that the number of registered demat accounts in India with holdingshas surpassed 17 crore. There are now 17.10 crore demat accounts as of August 31st, 2024.
Even though the stock market saw increased volatility in August, almost 42.3 lakh new demat accounts were opened. By the end of the month, this spike had raised the total to 17.10 crore, according to a report from ANI. Even while this growth was not as strong as the 44.44 lakh new accounts added in July, it was still a significant rise over the 31 lakh new accounts that were registered in August 2023.
Will the IPO frenzy continue?
According to Mohit Gulati, the sustainability of the IPO momentum will depend on various economic and market factors, including the outcome of the upcoming US elections, global economic conditions, and continued economic growth in India.
“I believe mainboard activity is here to stay for the foreseeable future. Access to the capital markets has enabled many new businesses to raise equity capital, promoting growth, contributing to private capex cycles, and creating jobs.
I just hope that the euphoric activity in the SME exchange does not have any adverse effects on the mainboard listings,” added Gulati.
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